Question

If the world price of a good is below its domestic price, the country will: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices import that good. export that good. put a price floor on that good. have a surplus of that good.

Answer 1

Answer:

import that good

Explanation:

International trade involves the exchange of goods and services between countries.

Due to comparative advantage that some countries have in producing goods they incur less cost than other countries when manufacturing such goods.

In the give scenario where world price of a good is below its domestic price, the country does not have comparative advantage in producing the good. Their cost of production is higher than world price.

The best option will be to import the good. This will save the country high cost of production locally